Posts Tagged ‘revenue’

postheadericon Microsoft cloud strength and hardware progress drive record first-quarter revenue

Strong performance across commercial and consumer segments delivers revenue of $ 23.20 billion.

REDMOND, Wash. — October 23, 2014 — Microsoft Corp. today announced revenue of $ 23.20 billion for the quarter ended September 30, 2014. Gross margin, operating income and diluted earnings per share (“EPS”) for the quarter were $ 14.93 billion, $ 5.84 billion and $ 0.54 per share, respectively.

These financial results include $ 1.14 billion of integration and restructuring expenses, or an $ 0.11 per share negative impact, related to both Microsoft’s restructuring plan announced in July 2014 and the ongoing integration of the Nokia Devices and Services (“NDS”) business.

The following table notes the impact of the integration and restructuring expenses on the company’s financial performance (“Noted Items”). This financial information is provided to aid investors in better understanding the company’s performance. All growth comparisons relate to the corresponding period in the last fiscal year.

Earnings 10-23-14“We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,”  said Satya Nadella, chief executive officer of Microsoft. “Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organization.”

“We delivered a strong start to the year, with continued cloud momentum and meaningful progress across our device businesses,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We will continue to invest in high-growth opportunities and drive efficiencies across the organization to deliver long-term shareholder value.”

Devices and Consumer revenue grew 47% to $ 10.96 billion, with the following business highlights:

  • Office 365 Home and Personal subscribers totaled more than 7 million, representing more than 25% sequential growth over the previous quarter.
  • Surface Pro 3 momentum drove Surface revenue of $ 908 million.
  • New Windows consumer licensing programs drove positive unit growth while OEM non-Pro revenue declined 1%.
  • Total Xbox console sales were 2.4 million, growing 102%, and Xbox One launched in 28 new markets.
  • Phone hardware revenue exceeded $ 2.6 billion with ongoing focus on execution discipline.

Commercial revenue grew 10% to $ 12.28 billion, with the following business highlights:

  • Server products and services revenue increased 13%, with double-digit growth for SQL Server, System Center and Windows Server.
  • Office Commercial products and services revenue grew 5% as customers transition to Office 365.
  • Commercial cloud revenue grew 128% driven by Office 365, Azure and Dynamics CRM.
  • Lync, SharePoint and Exchange, our productivity server offerings, collectively grew double-digits.
  • Windows volume licensing revenue increased 10%.

“Customers are embracing our latest technologies from Surface Pro 3 and Office 365 to Azure and SQL Server,” said Kevin Turner, chief operating officer of Microsoft. “Through great execution by our sales teams and our partners, we have been able to deliver our truly differentiated value to the marketplace.”

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Webcast Details

Satya Nadella, chief executive officer, Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, John Seethoff, deputy general counsel, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/investor. The webcast will be available for replay through the close of business on October 23, 2015.

Noted Items Definition

Integration and restructuring expenses include employee severance expenses and costs associated with the consolidation of facilities and manufacturing operations, including asset write-downs and contract termination costs, resulting from Microsoft’s  restructuring plan. Integration and restructuring expenses also include systems consolidation and other business integration expenses, as well as transaction fees and direct acquisition costs, associated with the acquisition of NDS.

Integration and restructuring expenses were $ 1.14 billion during the three months ended September 30, 2014, due mainly to restructuring charges of $ 1.05 billion, including employee severance expenses and the write-down of certain assets in connection with the restructuring plan.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services, devices and solutions that help people and businesses realize their full potential.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

  • intense competition in all of Microsoft’s markets;
  • increasing focus on services presents execution and competitive risks;
  • significant investments in new products and services that may not be profitable;
  • acquisitions, joint ventures, and strategic alliances may have an adverse effect on our business;
  • impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;
  • Microsoft’s continued ability to earn expected revenues from its intellectual property rights;
  • claims that Microsoft has infringed the intellectual property rights of others;
  • the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;
  • cyber-attacks and security vulnerabilities in Microsoft products that could reduce revenue or lead to liability;
  • disclosure of personal data that could cause liability and harm to Microsoft’s reputation;
  • outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;
  • government litigation and regulation that may limit how Microsoft designs and markets its products;
  • potential liability under anti-corruption and trade protection laws resulting from our international operations;
  • Microsoft’s ability to attract and retain talented employees;
  • adverse results in legal disputes;
  • unanticipated tax liabilities;
  • our hardware and software products may experience quality or supply problems;
  • exposure to increased economic and operational uncertainties from operating a global business;
  • catastrophic events or geo-political conditions may disrupt our business; and
  • adverse economic or market conditions may harm our business.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/investor.

All information in this release is as of October 23, 2014. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, financial analysts and investors only:

Chris Suh, general manager, Investor Relations, (425) 706-4400

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com/. Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. PDT conference call with investors and analysts, is available at http://www.microsoft.com/investor.

News Center

postheadericon New research highlights potential for technology to help fuel significant revenue and job growth by SMEs

Denpasar , Bali, INDONESIA Oct . 5 , 2013 Tech-savvy small and medium-sized enterprises (SMEs) created more new jobs and drove more revenue gains over the past three years than SMEs using little technology, according to new research commissioned by Microsoft Corp. and independently conducted by The Boston Consulting Group (BCG), a global management consulting firm and a leading adviser on business strategy.


Successful Tech-Savvy SMEs
Successful Tech-Savvy SMEs
October 03, 2013
How Microsoft enables their productivity and growth
Downloads:
Web

The BCG report, Ahead of the Curve: Lessons on Technology and Growth From Small Business Leaders, which is being published Saturday, found there is potential for SME revenue to grow by a combined $ 770 billion in the five primary countries if more SMEs could achieve the growth rates of those SMEs that use modern IT. These same SMEs could add some 6.2 million new jobs in those countries alone. What’s more, BCG believes that this association between IT adoption and growth would be consistent in countries across the world.

“SMEs are a critical growth engine for jobs and economies today, and we wanted to better understand the impact of technology on these small businesses,” said Orlando Ayala, corporate vice president and Microsoft chairman of Emerging Markets. “Since the economic crisis, many economies have struggled to return to strong economic growth and to create new jobs, and this research suggests strongly that greater use of advanced IT by SMEs can potentially boost both growth and employment.”

BCG’s research found that over the past three years, IT-enabled SMEs, which BCG refers to as “technology leaders,” grew revenues 15 percentage points faster and created twice as many jobs as SMEs that use less technology. The research also revealed that across nearly all product categories, these fast-growing SMEs use more Microsoft solutions than any other products, and that SMEs view Microsoft as the top partner for new and future technology needs. In fact, when asked what technologies survey respondents could not live without, they chose Microsoft Office as the top productivity application over all others. What’s more, SMEs that adopted Microsoft Cloud services grew faster than SMEs that do not use any Microsoft products.

“The BCG research revealed that Microsoft products and services are the No. 1 choice of these technology leaders,” said Vahé Torossian, Microsoft’s corporate vice president of Worldwide Small and Mid-Market Solutions and Partners organization. “Microsoft is the brand that small businesses trust and use to power their growth.”

The BCG report argued that the latest wave of technological advancement, such as cloud services, brings potential for the most far-reaching innovation and business growth ever, creating an opportunity for more SMEs to achieve the growth rates of technology leaders by leveraging technology to fuel productivity and growth. The research revealed that high-performing SMEs stayed ahead of mainstream IT adoption, riding new waves of advancement to improve productivity, connect with new customers and markets, particularly outside their own region or country, and compete with much larger players. These companies employ the full range of available tools — from productivity software to Internet connectivity and cloud-based services.

But at the same time, the research revealed a risk, because SMEs’ adoption of IT is decidedly uneven. Across the world, many SMEs, and their customers, don’t have access to modern broadband networks, and many lack the skills to get the most out of IT. Many SMEs are also still using large amounts of old and less efficient hardware and software. New devices are also sometimes very expensive due to high import duties, and SMEs are concerned about online security and privacy. But the growth prospects described in the study are too important for governments and the IT industry to ignore.

The risk of a growing technology gulf is relevant to governments looking to maximize economic growth, and it is an opportunity for policy-makers and the IT industry to implement strategies to remove barriers to IT adoption by addressing small businesses’ top concerns about using more technology.

“Our objective is to help more SMEs transition to, and benefit from, modern IT,” Torossian said. “For customers, it means providing product training and helping SMEs understand the full range of available devices and services, but it also means community investments such as skills training and partnering with governments and communities to remove the bigger, systemic barriers that hold SMEs back.”

The results of the BCG survey of more than 4,000 SMEs in five of the world’s largest and most diverse economies were consistent across all industry sectors, but there were some surprises from emerging markets and with women-owned firms. Technology leaders in emerging markets grew jobs and revenue faster than in developed markets and are even quicker than their developed market counterparts to embrace new tools, and women-owned firms are among the most technically advanced, innovative and successful firms interviewed.

“What we are seeing is that technology can help level the playing field for groups with historical disadvantages in business, and we would like to see more SMEs benefit from being technology leaders,” Ayala said. “Microsoft is committed to enabling people from all over the world and bridging the gender gap in computing careers with tools and programs to provide opportunities in the computing field for business growth and innovation.”

A copy of the report can be downloaded at http://www.bcgperspectives.com.

More about how Microsoft is working with SMEs can be found at

http://www.microsoft.com/en-us/news/presskits/SMETechLeaders/default.aspx .

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.

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